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Once Imperiled, U.S. Aid to Egypt Is Restored

WASHINGTON — An intense debate within the Obama administration over resuming military assistance to Egypt, which in the end was approved Friday by Secretary of State Hillary Rodham Clinton, turned in part on a question that had nothing to do with democratic progress in Egypt but rather with American jobs at home.

A delay or a cut in $1.3 billion in military aid to Egypt risked breaking existing contracts with American arms manufacturers that could have shut down production lines in the middle of President Obama’s re-election campaign and involved significant financial penalties, according to officials involved in the debate.

Since the Pentagon buys weapons for foreign armed forces like Egypt’s, the cost of those penalties — which one senior official said could have reached $2 billion if all sales had been halted — would have been borne by the American taxpayer, not Egypt’s ruling generals.

The companies involved include Lockheed Martin, which is scheduled to ship the first of a batch of 20 new F-16 fighter jets next month, and General Dynamics, which last year signed a $395 million contract to deliver component parts for 125 Abrams M1A1 tanks that are being assembled at a plant in Egypt.

“In large part, there are U.S. jobs that are reliant on the U.S.-Egypt strong military-to-military relationship,” a senior State Department official said, speaking on condition of anonymity under rules set by the department. In deciding how to proceed, the official said, Mrs. Clinton and her colleagues “were looking at our overall national security goals, as well as any domestic issues.”

Mrs. Clinton’s decision to resume military assistance, which has been a foundation of United States-Egyptian relations for over three decades, sidestepped a new Congressional requirement that for the first time directly links arms sales to Egypt’s protection of basic freedoms. No new military aid had been delivered since the fiscal year began last October, and Egypt’s military has all but exhausted funds approved in previous years.

Mrs. Clinton’s decision provoked sharp criticism from lawmakers across the political spectrum, as well as human rights organizations. Senator Rand Paul, Republican of Kentucky, criticized it as “beyond the pale.”

Referring to Egypt’s recent decision to prosecute four American-financed international advocacy organizations, Mr. Paul added, “It sets a precedent that America will not punish its aggressors but instead give them billions of our taxpayers’ dollars.”

Mrs. Clinton used her authority under the new law to waive a requirement that she certify Egypt’s protection of human rights. That she would not certify that the military had complied was in itself a rebuke to Egypt’s transitional military leaders, who have moved slowly to yield power and to lift a decades-old state of emergency, but it nonetheless allows the Egyptian military to continue to arm and equip its forces.

“The secretary’s decision to waive is also designed to demonstrate our strong support for Egypt’s enduring role as a security partner and leader in promoting regional stability and peace,” the State Department’s spokeswoman, Victoria Nuland, said in a statement. Both the military assistance and an additional $250 million in economic and political assistance also required Mrs. Clinton to certify that Egypt was upholding the Camp David peace accords with Israel, which she did on Friday.

The statement and continuing military and other assistance to Egypt, senior administration officials said, rewarded the extraordinary progress the country has made since the overthrow last year of its autocratic president, Hosni Mubarak. Egypt has elected a new Parliament in a vote widely seen as free and fair, and it has scheduled a presidential election in May, with a runoff to follow in June.

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“We’ve seen more progress in 16 months than we’ve seen in 60 years,” the senior State Department official said.

Even so, the debate within the administration was unusually fraught, officials said, especially after Egypt had imposed a travel ban on seven Americans who were charged as part of the case against the American organizations.

Some in the State Department, echoing the concerns from Capitol Hill and human rights advocates, argued that the administration should have withheld new military aid until the case was fully resolved and the presidential election held.

Mrs. Clinton, officials said, favored a partial waiver, allowing some, but not all, of the assistance to begin. That would maintain leverage over Egypt’s generals to transfer political power to a newly elected government without jeopardizing existing military contracts.

A looming deadline for payments, however, forced the issue before then, and the White House and Pentagon pressed for a waiver, officials said. A White House spokesman referred questions to the State Department, and the Pentagon did not respond to requests for comment.

The military assistance to Egypt underscores a point Mrs. Clinton and other officials have made when it comes to foreign aid in general: much of it comes back to American corporations and organizations for equipment or services.

“Lockheed Martin values the relationship established between our company and the Egyptian customer since the first F-16s were delivered in the early 1980s,” said Laura F. Siebert, a spokeswoman for the company, which is based in Fort Worth.

The M1A1 components are built in factories in Alabama, Florida, Michigan, Ohio and Pennsylvania, several of them battleground states in an election that has largely focused on jobs. Because the United States Army plans to stop buying new tanks by 2014, continued production relies on foreign contracts, often paid for by American taxpayers as military assistance.

Senator Patrick J. Leahy, Democrat of Vermont, who added the certification requirements to legislation authorizing military aid to Egypt, called the decision to waive them regrettable, and the resumption of aid “business as usual.”

Jennifer Steinhauer contributed reporting.

A version of this article appears in print on March 24, 2012, on Page A6 of the New York edition with the headline: In Move That Favors American Industry, U.S. Grants Waiver to Restore Aid to Egypt. Order Reprints|Today's Paper|Subscribe